Finance 260 Exam 1
"The distortion of the medium of exchange (money) caused when amount of money
grows faster than the availability of goods and services to spend it on" is the
definition of: - correct answer-higher inflation
A dollar promised to you a year from now is not worth as much to you as a dollar in
hand today. Why? - correct answer-A dollar given a year from now would be worth
less because of inflation. Inflation decreases the values of a dollar.
Any violation of the terms of a loan contract constitutes - correct answer-default
balloon payment - correct answer-a long string of small payments with one large
payment at the end
Chapter 13 Bankruptcy is also referred to as - correct answer-"workout" or "wage
earner" plan
collateral - correct answer-something a lendor can hold in exchange for the money
Compound interest - correct answer-interest that adds on interest
credit - correct answer-these reduce your tax bill
deductions - correct answer-taxes, medical, charitable contributions, some interest
, exemptions - correct answer-yourself and dependants
Filing status - correct answer-whether you are single, married, etc.
Give 1 example of a typical riskless investment and briefly describe how it would be
used - correct answer-There is NO SUCH THING as a riskless investment.
gross income - correct answer-the amount of income before deductions, exemptions,
or taxes
Having your investment build over time by earning interest on your interest is the
idea behind - correct answer-compounding
if the lending agreement does not contain a "wage assignment clause" the court
seizing of your wages is called - correct answer-garnishment
If you cannot complete your filing of the previous year's federal income taxes by April
15th you can file for an extension which - correct answer-automatically extends your
filing deadline to Aug. 15th
List 3 items that are deductible on Schedule A (Itemized Deductions) - correct
answer-Health insurance, home mortgage, business write offs
List 4 pieces of information about you that might impact your credit score (FICO) -
correct answer-1) how much you buy on credit
"The distortion of the medium of exchange (money) caused when amount of money
grows faster than the availability of goods and services to spend it on" is the
definition of: - correct answer-higher inflation
A dollar promised to you a year from now is not worth as much to you as a dollar in
hand today. Why? - correct answer-A dollar given a year from now would be worth
less because of inflation. Inflation decreases the values of a dollar.
Any violation of the terms of a loan contract constitutes - correct answer-default
balloon payment - correct answer-a long string of small payments with one large
payment at the end
Chapter 13 Bankruptcy is also referred to as - correct answer-"workout" or "wage
earner" plan
collateral - correct answer-something a lendor can hold in exchange for the money
Compound interest - correct answer-interest that adds on interest
credit - correct answer-these reduce your tax bill
deductions - correct answer-taxes, medical, charitable contributions, some interest
, exemptions - correct answer-yourself and dependants
Filing status - correct answer-whether you are single, married, etc.
Give 1 example of a typical riskless investment and briefly describe how it would be
used - correct answer-There is NO SUCH THING as a riskless investment.
gross income - correct answer-the amount of income before deductions, exemptions,
or taxes
Having your investment build over time by earning interest on your interest is the
idea behind - correct answer-compounding
if the lending agreement does not contain a "wage assignment clause" the court
seizing of your wages is called - correct answer-garnishment
If you cannot complete your filing of the previous year's federal income taxes by April
15th you can file for an extension which - correct answer-automatically extends your
filing deadline to Aug. 15th
List 3 items that are deductible on Schedule A (Itemized Deductions) - correct
answer-Health insurance, home mortgage, business write offs
List 4 pieces of information about you that might impact your credit score (FICO) -
correct answer-1) how much you buy on credit
